$SONA 4-HR Chart Signaling a Buy Opportunity

There is no shortage of COVID plays. SONA Nanotech is one such play and is lining up to be a strong buy target for investors seeking to get in the game. Firstly, we have news that that British PM Boris Johnson he plans to have testing and tracing scheme in play by June 1st, with similar news announced by Canadian prime minister Justin Trudeau. Futhermore, Sona Nanotech is finalizing submission to Health Canada and FDA for it’s quick-result testing kit.

Along with these positive developments, there are technical indications that suggest a trend reversal could be in.

  1. MACD Cross
    • MACD crossed today, potentially signalling the start of a short term uptrend
    • Recent news events and upcoming catalysts could drive the MACD up passed the 0-line. Consequently, this would push it back into true bull territory if the trend holds
  2. RSI
    • RSI is creeping into bull territory after closing at 46.67. While this doesn’t say much in itself, it is continuing to push away from its recent low of 29
  3. 180 EMA
    • SONA not only trading above this long-term trend indicator, but also pushed strongly off that key long-term support
    • This bounce wiped out 6 bearish candles at once to close at the high of the day

For those not impressed, there is another analysis on offer:

  1. OBV
    • OBV line remains strong, indicating sustained buying pressure, despite recent decrease in share price.
    • There does seem to be incongruity between share price and buying pressure
  2. Structural Support Zone
    • The support line drawn in the above graph serves as an alternative support indicator to the 180 EMA
    • The stock saw a formidable push last tiem it found itself in this price zone.
    • Other traders may have noticed the same thing. The stock started making a big move in the late afternoon, with the bears finally giving up

Momentum, volume, and two support indicators combine to present us with what could be a very profitable entry in a stock that has many catalysts going for it at the moment.

FULL DISCLOSURE: I currently hold a position in the company discussed in this article.

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